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4/11/2003 - The Oregonian: PGE paid $10 in tax to Oregon for 2002

Excerpt: "We didn't have a very good year from an earnings perspective," said Jim Piro, PGE's chief financial officer. "You've got to have income to pay taxes."
(PGE reported earnings of $66 million in 2002)

7/1/2003 - Montana sues PGE, 11 other energy companies

"We've paid an unacceptably high price for the energy companies' deception, not just through skyrocketing power bills but in lost jobs and business opportunities. These lawsuits aim to set that straight," Montana Attorney General Mike McGrath said.

5/1/2003 - The Oregonian, Steve Duin Editorial: Looting persists at a modern shrine to greed

Excerpt: "How does Executive Vice President Fred Miller justify accepting retention bonuses of $400,000 and a performance bonus of $100,000 when so many of his colleagues have lost their retirement accounts? He protests he's getting less than what he was promised when Enron bought PGE in 1997."

12/6/2001 - Ashland Daily Tidings: Former PGE executives cashed in on Enron stock

Excerpt: "Two former top Portland General Electric executives are being sued after they cashed in their Enron stock for more than $100 million before the bankrupt Texas energy company's stock collapsed."

"Kenneth Harrison, who was chief executive officer when PGE was sold to Enron in 1997, made $75 million on his stock sale last year."

"Joseph Hirko, the former PGE chief financial officer, made $35 million."

1/17/2002 - Houston Chronicle: Labor Dept. will probe Enron retirement plan

Excerpt: "The Labor Department said Wednesday that many Enron employees - including PGE workers with 401(k) plans invested in Enron stock - have lost 70 percent to 90 percent of their retirement assets."

'Enron's employees have gotten the short end of the stick in the sudden collapse of this company and we are committed to doing everything we can to help them,' Labor Secretary Elaine Chao said Wednesday."


Quotes About PGE/Enron or
People's Utility Districts


"These rates, and they are very high rates, are sucking the life out of the local economy."

— Ken Canon, Executive Director, Industrial Customers of Northwest Utilities, on PGE/Enron rates. [link]

"Oregon law mandates that the sale have public benefit, I don’t see it. Not being Enron is simply not enough."
— Erik Sten, Portland City Commissioner, commenting on Texas Pacific's PUC filing to buy PGE that provides NO reduction in electric rates. [link]

"Texas Pacific is in it to make money, and they want high returns," she said, "and the quickest way to get that is by selling off assets and getting out."
— Lynn Hargis, attorney for Public Citizen, the consumer advocacy group, in the Portland Tribune article “Will new owners revive PGE or direct ‘Enron, Part II’?”, 11/21/2003. [Link]

"Generally speaking, you like to dance with the girl that brung you, and if you can’t sometimes you have to shoot her."
— David Bonderman, Texas Pacific chief, commenting about corporate buyouts.

“The commissioners at FERC have opened the door to deregulation, which will benefit every user of electricity,” said Harrison. “Competition means lower prices and better service to customers, whether you’re a manager of a factory, a small business owner or a residential user trying to meet every month’s budget. This merger will create a company committed to being the leader in supplying innovative and competitively priced electrical service to everyone."
— Ken L. Harrison, then chairman and CEO of PGE in a 1996 press release about the Enron merger. Do you feel you're benefiting from paying higher rates than every single publicly owned electric utility in Oregon? [Link]
(While employees and others lost almost everything in stock, Ken Harrison made $75.2 million selling his. He's a defendant in a U.S. Labor Department lawsuit.)

"Electricity rates immediately dropped for PGE customers once they became Columbia River PUD customers. Residential customers who had been paying $60.10 a month to PGE for 1,000 kilowatt-hours of electricity began paying $52.50 a month."
— The Oregonian, in an article on 10/19/2003 describing what happened when voters approved the annexation of electricity customers in Scappoose, St. Helens and Columbia City to the Columbia River PUD from PGE. Their rates are now 24 percent less than PGE. [link]

"Pilon said PGE needlessly scared people in 1999, sounding alarms about the possibility of skyrocketing rates and power system failures that did not turn out to be true. Now, he said, PGE and PacifiCorp are doing it again.

Both utilities oppose the creation of a people's utility district in Multnomah County.

'The same garbage that PGE people are pumping now, PGE was pumping out then,' Pilon said."
— Fergus Pilon, general manager of the Columbia River People's Utility District, describing how a similar campaign to what we're experiencing now was run there. [link]
(Columbia River PUD's overall rates are 24 percent less than PGE's)

"They had this scheme where Enron would become the non-regulated operator of this distribution system," Pilon said. "Within a few days petitions were collected to oppose it."
— Fergus Pilon, GM of the Columbia River PUD, talking about a 1999 effort there. [link]

"Despite our employer’s enthusiasm for deregulation, those of us who have worked in the electric utility industry over the years have always had serious misgivings about whether a deregulated industry would be able to provide the kind of reliable service that the nation expects and that we have taken pride in providing. But we had no idea how unregulated the industry actually is – and that our employer’s financial dealings would completely escape any meaningful regulatory scrutiny."
— Donald Eri, IBEW Local 125 member and retired PGE worker, testifying before the U.S. Senate Commerce, Science and Transportation Committee.
(A PUD would have oversight at the local level. Five board of directors, all residents of Clackamas County, would be elected by county voters.)

"Want to know what happens when the public takes over a private system? First, your bills go down. Every time. I'm writing this on Long Island, where the public recently booted out a private power company bigger than PGE. The outcome? Every Long Island customer got a $100 refund check plus a 12 percent cut in rates and a big boost in reliability."
— Greg Palast, author of "The Best Democracy Money Can Buy," in an opinion piece entitled "Leaving PGE in the hands of creditors is a bad joke," published 9/18/2003 in The Oregonian. [link]

"If you can pay less to buy your house than you would to rent it, why wouldn't you buy it?"
— Ed Brookshier, Hermiston's city manager. [link]
(Hermiston Energy Services, a city-owned utility, acquired PacifiCorp's poles and power lines in 2001)

"Because they are locally controlled, People's Utility Districts are more accessible and responsive to their customers' needs. They are a "not-for-profit" entity, whose cost savings are passed directly to their customers.

The Board of Directors sets rates based upon the cost of providing service. The Pud's power supply is generally provided by BPA at rates that are less than any of Oregon's private utility rates. The PUD passes these lower rates on to customers. The Board is also responsible for hiring professional managers and staff to operate the utility."
— Oregon PUD Association, as stated on their Web site. [link]

"You see, that company is scheming--as we speak--to spend a pile of your money. Not on new generation, poles or wires. Not on "green" energy. Nope, PGE is going to give your dough to the propaganda whizzes at the ad firm Gard & Gerber, who will attempt to sweet-talk you into voting against the public takeover of PGE's assets."

"Just how much of your money are Portland's power players going to need? As much as it takes to protect themselves. 'We'll spend a million between us,' says PGE executive vice president Fred Miller, who expects to get crosstown rival PacifiCorp to split the tab."
— Willamette Week, 3/12/2003, in article entitled "PGE: A royal pain in the pocketbook." [link]
(Gard & Gerber, who lists PGE as a client on its company site, owns a Web site masquerading itself as "Citizens Against the Government Takeover.")

Meek fears that Enron intends to use federal bankruptcy law to help Portland General escape state regulation of its energy rates. A deal with a new buyer, he contends, could be structured so the assets fall only under federal regulation, resulting in some $2 billion worth of higher costs for Oregon ratepayers. Such a sale could come only after a reorganization plan is approved by the bankruptcy court. Until then, "Enron has no incentive to sell," Meek says.
— Dan Meek, a Portland lawyer and utility consumer activist. Published in BusinessWeek online on August 15, 2003. [link]

"This is a new dynamic -- outside companies owning local utilities," Canon said. "The question the PUC has to ask is whether we're using Oregon customers' money to help subsidize the money-losing activities of Enron."
— Ken Canon, Executive Director, Industrial Customers of Northwest Utilities, on Enron pocketing PGE ratepayer paid income tax payments. [link]

"These are the people who made Enron possible," says Canon of the creditors, the largest of which are New York commercial banks. "They didn't intend to be owners of a regulated utility. Their interest is in getting as much money out as possible as quickly as possible."
— Ken Canon, Executive Director, Industrial Customers of Northwest Utilities, on doling out PGE's stock to Enron's creditors. [link]

"I've become convinced as a result of those negotiations that they want PGE customers to be liable for some of their debt," he said. "These people don't give a hoot about Portland, Oregon. If Enron attempts to do something to hold Portland ratepayers liable, we do have the power of condemnation in our toolbox."
— Randy Leonard, Portland City Commissioner [link]

"I think they're up to no good," Sten said of Enron's intentions. "But we need to prove it."
— Erik Sten, Portland City Commissioner [link]
(
The Oregonian wrote on July 23, 2003, "Sten has grown increasingly suspicious of the stock distribution plan, which he claims could saddle the utility with liabilities from lawsuits and regulatory penalties and force rate increases for PGE customers.)

"PGE's rates were constructed anticipating that $90 million a year would be paid in taxes. That wasn't happening here. Enron was pocketing the money. I wonder why no one at the PUC stepped in."
— Dan Meek, a Portland lawyer and utility consumer activist. [link]
(A PUC administrator responded, "I don't think there's an issue there")

"We didn't have a very good year from an earnings perspective. You've got to have income to pay taxes."
— Jim Piro, PGE's chief financial officer. Published in The Oregonian on
July 26, 2002. [link]
(PGE reported earnings of $66 million in 2002)

Enron "sucks money out of ratepayers in Oregon, offsets it against losses elsewhere and pockets the money."
— Dan Meek, an attorney and utility reform activist. [link]

"Enron was largely able to avoid federal income taxes with big losses elsewhere in its organization and tax-shelter subsidiaries in the Cayman Islands."

"In the 4½ years Enron has owned PGE, it has received at least $608 million in profits and taxes from the Portland utility."
— KATU News, February 4, 2002 [link]
(Profits continue to leave Oregon. PGE is Enron's "cash cow.")

Enron did its best to "pick PGE clean."
— Erick Johnson, a Portland lawyer who represents utilities but does not represent PGE or Enron. [link]

"Now I'm just a journeyman lineman for this outfit, but in my 23 years of experience working for PGE I have never seen this company treat its employees so terribly. I've seen a lot of management come and go, but these last few years since Enron crashed have been the pits."
— Dave Covington, PGE lineman and a member of IBEW Local 125, in an letter published in The Oregonian.
[link]
(Please read the entire letter)

"Little did those of us working hard every day to make the company successful know what was going on at the top of Enron," said Bob Vigil, an electrical machinist working foreman. "We trusted management’s glowing reports of strong financial growth and opportunity. Then in October, Enron’s house of mirrors came crashing down."
— Bob Vigil, a member of IBEW Local 125, testifying before the U.S. Senate Commerce, Science and Transportation Committee.
(PGE employees were locked out of their 401(k) plans for four crucial weeks while the stock value plunged to pennies a share.)

"But it's the wrong tactic for a company whose workers lost their 401(k) savings in worthless Enron stock. And it's an insult to customers hit with 30 percent and 50 percent power rate increases."
— The Oregonian, in an editorial discussing how Enron paid five top PGE executives bonuses of $975,000 last year, the same amount they stand to collect this year. Published on May 1, 2003. [link]
(Aptly entitled "Adding insult to injury at PGE")

"Enron's employees have gotten the short end of the stick in the sudden collapse of this company and we are committed to doing everything we can to help them."
— U.S. Labor Secretary Elaine Chao in announcing that the agency will probe Enron's retirement plan. Published in the Houston Chronicle, January 17, 2002. [link]

"They didn't want to seem as if they were not supportive of the company."
— Geordie Hrdlicka, a certified financial planner in Houston who counseled Enron employees. Published in the Houston Chronicle, January 17, 2002. [link]
(Hrdlicka also stated employees feared being fired if they started to sell off company stock.)

Enron “is a story of people so shameless and greedy that literally as the bankruptcy papers were being drawn up, they were still passing what remained of the firm’s cash out to themselves—$55 million on the last working day before they filed for Chapter 11.”
— Richard Trumka, AFL-CIO Secretary-Treasurer, at a December 12, 2001 meeting before the U.S. House Financial Services Committee.

“This is an energy company that morphed into a trading company involved in hedge funds and derivatives. It took on substantial risk, created secret off-the-books partnerships and, in effect, cooked the books under the nose of accountants and investors.”

“At the time when executives, board members and other insiders were selling over $1 billion in stock and profiting handsomely,” Dorgan said, “employees and investors were being set up to take a financial beating.”
— U.S. Senator Byron Dorgan (D-N.D.), chairman of the Senate Commerce, Science and Transportation Committee’s Consumer Affairs, Foreign Commerce and Tourism subcommittee, which held a hearing where PGE workers testified about their 401(k) losses.

"How does Executive Vice President Fred Miller justify accepting retention bonuses of $400,000 and a performance bonus of $100,000 when so many of his colleagues have lost their retirement accounts? He protests he's getting less than what he was promised when Enron bought PGE in 1997."
— Steve Duin of The Oregonian in an editorial. [link]

"According to PGE's annual report, filed last week with the Securities and Exchange Commission, CEO Peggy Fowler took home $979,028 last year. That's nearly 25 percent more than Fowler earned in 2000..."

"Fowler's top lieutenant, Fred Miller, received a similar increase in percentage terms, taking home $541,102 last year."
— Willamette Week, March 26, 2003, in an article entitled "Ka-ching! PGE's Big Payout."

"When workers at Portland General die, there's a little more money to spend on the top executives of the Enron subsidiary," the Houston Chronicle writes. "The utility has bought life insurance policies on the lives of its rank-and-file employees where the company is the beneficiary when an employee dies. That money goes for special compensation and retirement benefits for its top executives and directors."
— The Houston Chronicle, April 24, 2002, describing PGE's use of "dead peasant" policies, called that because they're taken out on low-ranking employee. PGE employees stated they weren't aware PGE was betting on them dying. [link]

"People who got out of Enron, including Harrison and Hirko, did well," Grenley said. "If you were a long-term investor who held the stock, you lost practically everything."
— Gary Grenley, a Portland attorney, who filed a class action lawsuit on behalf of PGE shareholders. [link]
(Ken Harrison, former CEO of PGE sold one million shares for $75.2 million while Joseph Hirko, former CFO made $35 million. Both are accused of misleading PGE shareholders in the 1997 PGE/Enron merger.

"At various times during 1999 and early 2000, numerous EBS executives and employees told Rice, Hirko, Yeager and Shelby that the Enron network was not intelligent, and Enron's press releases and marketing materials were false and misleading. Despite these warnings, and other negative information about EBS, Rice, Hirko, Yeager and Shelby failed to correct past false statements and continued to issue new false statements."
— The Oregonian quoting statements made within a 218-count grand jury indictment charging Joseph Hirko and six others with deceiving investors. Hirko and four others were also charged with insider trading and money laundering. [link]

"PGE's own transcripts of telephone conversations, submitted to federal regulators, show that some of the utility's employees raised concerns about questionable transactions, but they did not report those concerns to authorities."
Jeff Brady of Oregon Public Broadcasting who authored a three-part series on the PGE/Enron power trading scandal. Published in the The Business Journal of Portland on July 5, 2002. [link] [RealPlayer at ]

View numerous quotes that implicate PGE in energy trading fraud.

The following three quotes are among a three-part report on the power trading scandal by Oregon Public Broadcasting's Jeff Brady. A 30-minute RealPlayer audio broadcast is here and OPBs energy trading scandal section is here. Some of the OPB report was also published in the The Business Journal of Portland on July 5, 2002. [link]

"I don't expect traders to know that when they buy or sell from someone that they know the ultimate destination or how it's used. And our research showed that they didn't know that or weren't party to anything with a funny name attached to it."

— PGE Vice-President Fred Miller to OPB during a June 24th interview. One day later, PGE filed with federal regulators transcripts of telephone conversations among PGE, Avista and Enron employees that contradict Miller's statement and show that PGE employees knew fraud was occuring. [link] [RealPlayer at 14:20]

View numerous other quotes that implicate PGE in energy trading fraud.

"An examination of some of the transcripts shows that several PGE employees were aware of some of Enron's questionable trades but did not report them to authorities. In April 2000, transcripts show Enron trader John Forney as in 'Forney's Perpetual Loop' describing to a PGE transmission employee a plan to send power from California to Oregon and then back into California. That practice was part of "the Loop."

One PGE employee called the plan "squirrelly" another told a colleague at a differnt energy trading company "This is a scam and you know it."

Jeff Brady of Oregon Public Broadcasting [link] [RealPlayer at 15:00]

"The transmission people knew that something strange was going on--they really could have raised a red flag. One of the reasons they may not have is because Enron is their corporate parent. And that is something, I think, we'd be really interested to learn more about--whether or not there was pressure from Enron--direct or indirect--that cause PGE employees to look the other way."
Jason Eisdorfer of the Citizens Utility Board of Oregon in discussing possible reasons why PGE didn't inform regulators about questionable trades on OPB. Also published in The Business Journal of Portland on July 5, 2002. [link] [RealPlayer at 16:00]

"Thanks to the flagrant market manipulation in 2000 and 2001, Montana consumers paid rates that were anything but reasonable and just. In this state, businesses closed, jobs were lost and consumers were bilked out of millions".

"We've paid an unacceptably high price for the energy companies' deception, not just through skyrocketing power bills but in lost jobs and business opportunities. These lawsuits aim to set that straight."
Montana Attorney General Mike McGrath in filing a lawsuit against "PGE" accusing it of defrauding Montana consumers.

"I think this order is a major step toward addressing the manipulation that contributed to the extraordinary western power crisis," said FERC Commissioner William Massey. "Profit maximization is not an excuse for market manipulation."
— FERC ordered 60 power sellers and municipal utilities to explain why they should not have to repay unfair profits after the agency's March 2003 report found "epidemic" price manipulation by Enron and others. Published in the New York Times, June 25, 2003.

"We think there's enough evidence with the Death Star trades and the posting errors to make an argument that PGE mismanaged that portion of its trading."
— Lee Sparling, administrator of the PUC's electricity division, who led the staff review into PGE's involvement in illegal trading strategies. [link]
(PUC Commissioners have not initiated an investigation.)

"The job of the commission is to protect ratepayers, not the utility."
— Bob Jenks, executive director of Citizens Utility Board of Oregon (CUB), speaking out against the Oregon Public Utility Commission's decision to allow PacifiCorp to charge its customers to recover $131 million in costs racked up during the 2000-2001 power crisis. Published in the Portland Tribune,
July 26, 2002. [link]
(Appointed PUC members would have no oversight of a PUD. Instead, a Board of Directors who are residents of the PUD community would be elected by county ratepayer-owners.)

"They've gone from a consumer-oriented commission to an anti-consumer commission in little over a year, and you can lay that right in the lap of Governor Kitzhaber," he said. "It's very difficult once a commission loses credibility with consumers to get it back."
— Former PUC Chairman Ron Eachus, a long-time pro-consumer advocate, agreeing with criticism of the Oregon PUC. Published in the Portland Tribune,
July 26, 2002. [link]

"It's sad that state legislators would be looking to protect Enron's interests at the expense of Oregonians," he said. "I suppose I shouldn't be surprised at anything coming out of Salem, but this one is disappointing. Enron is strong enough already, without their help."
— Erik Sten, Portland City Commissioner, in response to House Bill 2356, passed by the House Rules and Public Affairs Committee in a 5-2 vote. It would prohibit Portland from using its powers of eminent domain to take control of PGE's assets. [link]

"The lawsuits are so numerous that consumer advocacy groups and public officials have become increasingly worried about whether an onslaught of negative rulings could cripple the utility's finances and force rate increases."
— The Oregonian on August  5, 2003 discussing lawsuits against PGE involving allegations of fraudulent electricity trades, unfair rate increases, and ruined retirement plans. [link]
(Additional information: Acquisition by Public v. Bankruptcy Path)

"Any rate increase with the rate of unemployment we have in Oregon is going to hurt. It's going to hurt real people; it's going to hurt the recovery."
— U.S. Representative Peter DeFazio, D-Ore., co-chairman of the Northwest Energy Caucus, in an article entitled "'March Miracle' allows BPA to shrink rate raise." Published in The Oregonian on
July 26, 2002.

"Two weeks shy of a bankruptcy restructuring deadline that's 14 months overdue, Enron -- and its loyalists at PGE -- continue to play out the charade that a fresh, new beginning for PGE is in the works."
— Steve Duin of The Oregonian recommending on June 19, 2003 that Portland put in motion condemnation through the power of eminent domain. [link]

"Sources close to the bankruptcy proceedings warn that Enron creditors are likely to be solely concerned with squeezing as much money from PGE as possible. If the OpCo spin-off becomes reality, either PGE or the entire bundle of assets could then be sold off to a large, multinational energy corporation."
— The Business Journal of Portland, June 17, 2002
(PGE endorsed a plan to spin a $10 billion asset-based company called OpCo Energy out of the Enron bankruptcy. The OpCo alternative would make PGE the centerpiece of Enron's rise from the ashes.)

“We had this hypothesis that the businesses together would be worth more than they would be separately. The evidence to date," Bienenstock conceded, "doesn't bear that out."
— Martin Bienenstock of the New York firm Weil Gotshal & Manges, Enron’s lead lawyer in the bankruptcy case, in discussing how Enron is "now almost certain to be broken up and its assets either sold off or distributed to creditors." [link]
(As PGE itself could be split into several pieces and sold to for-profit businesses, resulting in higher rates for consumers, why is PGE fighting lower-cost public ownership by individual counties?)

"If you're searching for stability, you're not going to get it through reorganization and transfer to the creditors."
— Ron Eachus, former chairman of the Oregon Public Utility Commission. [link]
(Enron critics believe that the dispersal process will drag out for two or three years while PGE/Enron looks for a buyer.)


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